View from around the state: Lawmakers have some work to do on state budget

In his final state budget before facing another election, Gov. Scott Walker is proposing significant investment in Wisconsin’s public schools and universities.

That’s a welcome change from his past state spending plans that cut funding for K-12 and higher education by hundreds of millions of dollars.

The governor also wants to hold the line on property taxes while expanding high-speed internet in rural areas, giving state workers a decent raise, helping the homeless, and keeping crucial road projects on track.

All of that is good. The Legislature should support those priorities as it dissects and adjusts the governor’s $76.1 billion, two-year state budget that begins July 1.

Unfortunately, spending in the governor’s budget is $370 million more than revenue, according to the Department of Administration. And it creates an estimated $738 million funding gap two years from now that state leaders will have to fix after the 2018 election.

That’s partly because the governor packs a lot of new spending and tax cuts into the second year of his budget, without a clear way to pay for it moving forward. And part of his plan is built on shaky assumptions.

The governor hopes to save $60 million, for example, by self-insuring state workers. But previous studies warned that idea could increase cost instead. If savings don’t materialize, Walker would scale back his increase to schools.

One easy item to remove from the governor’s budget request is a gimmicky sales tax holiday to save more than $11 million in state revenue.

We’re very happy to see the Republican governor wants to keep the vital Verona Road (Highway 151) road construction project on track southwest of Madison’s Beltline. The busy route serves some of the state’s fastest growing businesses, commuters and cross-state trucks. His budget also continues the important expansion of Interstate 39-90 from Madison to Beloit.

But more broadly, the governor has failed again to propose a sustainable funding system for roads. Debt payments are eating up more and more of the transportation budget, and the governor proposes borrowing an additional $500 million.

Walker has refused to raise the state gas tax or vehicle registration fee, even though they’ve been flat for a decade. He also has resisted new sources of revenue that reflect modern times. No-stop tolling on the interstates could bring in money from Illinois tourists, while mileage-based fees would collect contributions from battery-powered cars.

More fuel-efficient vehicles mean motorists are paying less tax than in the past. At the same time, the Department of Transportation has underestimated the rising cost of construction.

Speaker Robin Vos, R-Rochester, and the GOP-run Assembly have taken a stand for fiscal responsibility on transportation issues. They shouldn’t back down.

Senate Majority Leader Scott Fitzgerald, R-Juneau, is floating tax cuts for utilities and certain business property — paid for with some of the money the governor would steer to schools. That’s the wrong priority. The Legislature is already exempting manufacturers and farmers from most state income taxes at much higher cost than expected.

Lawmakers have a lot of work to do in the coming months. They should prioritize schools and universities, as the governor has, without jeopardizing future budgets.